We’re Building The Sexiest Program for Skift Global Forum

Skift Take: More audience participation and diverse speakers will make this year’s Skift Global Forum the best yet.

— Rafat Ali

Every year as we begin production for Skift Global Forum, we challenge ourselves to build the best program ever built for a travel conference—and that means consistently out-doing ourselves.

That’s why this year’s Skift Global Forum NYC, happening September 26-27 at Jazz at Lincoln Center’s Frederick P. Rose Hall, Time Warner Center NYC, will feature more audience participation, increased speaker diversity, and one of our first on-stage foray’s into the restaurant and food tourism sector. Gather up your frequent flyer miles because you cannot afford to miss this one.

More audience participation means more opportunities to get your questions answered.

The first couple years of Skift Global Forum NYC, we focused exclusively on short “TED-style” talks and one-on-one Q&As; and last year we moved towards panel and group discussions. In 2017, we want to go a step further and leave more time per speaker for questions from the audience. We’re still working on the logistics of how it will all work but our promise to you is that while we have the smartest minds in travel in one room together, we want to hear from you.

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Hearing from the same old people in the business will yield only the same results.

It’s no secret that skift focuses on diversity—in our hiring and in our world view. It’s one of our company’s core values and this focus is not lost in our event planning. That’s why this year we’re proud to have a more diverse lineup of speakers that includes people from different walks of life. There is still a lot of work to be done to bring people with unique backgrounds to the top in this industry, but we hope that as we hear from diverse people each year, we’ll getter a better perspective on what the future of travel looks like.

Finally, for the first time, our event in NYC will include sessions exclusively on the business of dining out and how it affects travel.

There’s no way to avoid it—Food and travel go hand in hand. That’s why last year we expanded our news coverage to include a unique look at the world of dining innovation with our acquisition of Chefs+Tech. And at this year’s Skift Global Forum, we wanted to bring together two of the food world’s biggest innovators to discuss the future of dining out, restaurant experience and changing consumer habits and expectations.

The good news is that as we continue to develop our program for this year’s event, we will add to our incredible lineup of speakers and define the topics they’ll discuss. There’s still so much left to come! Don’t miss your opportunity to join us at the biggest, best and most impactful travel conference of 2017.

Secure Your Spot

If you have any questions or are interested in sponsoring our event, don’t hesitate to reach out at forum@skift.com.

And as always, we couldn’t bring this event to life without our incredible sponsors: Button, Criteo, FareportalMapboxSmartlingSojern, and The Points Guy.


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Travel Companies Disappointed, Pleased Or Studying Trump’s Cuba Changes

Ramon Espinosa  / Associated Press

A vintage car passes in front of the Four Points by Sheraton hotel in Havana June 28, 2016. Trump’s changes in Cuba policy put U.S. hoteliers’ operations in Cuba in doubt. Ramon Espinosa / Associated Press

Skift Take: Now is the time for all travel companies to decline to be narrow-minded and to look at the big picture. For cruise lines to talk about the boost they might get in Cuba because hotels will be hard-hit is small-mindedness at its worst.

— Dennis Schaal

As the country’s latest position on travel to Cuba was revealed — kind of — Friday afternoon, tentative reactions from industry insiders started to roll in.

There was disappointment, frustration, confusion, some relief, and a lot of caution that the full picture would not be known still for weeks or months. Norwegian Cruise Line Holdings even labeled Trump’s Cuba travel policy revisions “a win for the cruise industry … ”

The biggest changes for travelers is that the U.S. will prohibit Americans from undertaking individual people-to-people trips to Cuba, and restrictions will be placed on doing business with hotels and attractions run by elements of the Cuban government.

President Donald Trump formally announced the policy Friday at a speech in Miami, couching it as the fulfillment of a campaign promise, the day after White House officials briefed reporters.

“The previous administration’s easing of restrictions on travel and trade does not help the Cuban people,” Trump said. “They only help the Cuban regime.”

Flights and cruises will be mostly left intact, but new restrictions will block business transactions with Cuban military enterprises.

The U.S. Department of Treasury’s Office of Foreign Asset Control still must come up with regulations to add fine print to broad policy, which will give travel companies more to work with.

More than a handful of U.S. airlines, including American Airlines, Southwest Airlines, JetBlue, and Delta, as well as multiple cruise operators, including Carnival, Norwegian, and Royal Caribbean, tout itineraries to Cuba. Five Expedia brands, including Expedia.com, Hotels.com, Travelocity, Orbitz and CheapTickets, started offering hotel bookings and private accommodations in Cuba last month, and the Priceline Group’s Booking.com has operated a Cuba business for some time. TripAdvisor is authorized to facilitate bookings to Cuba, and its editorial content about accommodations and activities there have been available for some time.

Overall, observers said getting rid of the option for individuals to choose people-to-people travel will likely have a wide impact as travelers who want to engage on that kind of trip will be forced to plan with an organizing group. The Obama administration made it possible for individuals to plan their own people-to-people trips in March of 2016.

Matthew Aho, a special advisor on Cuba at law firm Akerman, said that announcement last year came as airlines were promoting the launch of regularly scheduled commercial flights.

“The truth is that the only way to fill those flights was to make it possible for a lot more Americans to go to Cuba in a pain-free way,” he said. “I think that changing this policy really raises some serious questions about the viability, commercially, of regularly scheduled flights. It’s going to lead to a reduction in the number of Americans who are traveling to Cuba, it’s going to make it much more expensive.”

Aho also pointed out that spending a trip with a large group on big tours makes meaningful interactions with Cubans much more difficult.

“What this is going to do is prevent thousands of lawful American travelers who want to go to Cuba to enage in meaningful interaction wth Cuban people and want to stay in cases particulates [private homes] and eat in private restaurants, it’s going to prevent them from doing that,” he said.

Even for those in the travel industry who expected to see their own business get a slight boost, the news was not positive.

Eddie Lubbers, CEO and founder of inbound direct seller Cuba Travel Network, said he expects more visitors who want to go to Cuba without a crowd will turn to his service, which organizes approved trips for individuals and groups up to five people. He said that as travelers realize the Cuba picture is changing, they may look to a specialist to help arrange their trips.

“I think this is potentially good for our business,” he said. “Though in general terms, we’re not at all in the business of profiteering from sub-optimal situations and I think for the industry, of course, this is a setback.”

The Disappointed

One of the most pointed statements against Trump’s Cuba-policy changes came from World Travel & Tourism Council CEO David Scowsill, who labeled the reversal “a retrograde step for the Cuban people.”

“There is latent demand from the U.S. for people to visit Cuba to explore its history and culture, and it would be a retrograde step to revert once again to Americans traveling in groups,” Scowsill said in a statement. “Over the last months the uptake in travel from the U.S. to Cuba has not been as high as expected, primarily as hotel capacity has not kept up with the demand, leading to some of the U.S. airlines cutting back capacity to the island. President Trump’s announcement will put further pressure on the airlines.”

It won’t only be Cubans who will suffer from the changes, he argued.

Scowsill concluded: “There is plenty more scope to grow the travel sector in Cuba. The country is not reliant on the US market for further tourism growth, but it is American businesses and leisure consumers that will suffer from this proposed move.

The American Society of Travel Agents decried the changes but said the organization planned to participate in the process as the Treasury and Commerce departments come up with new regulations.

“ASTA is disappointed with the Trump administration’s announcement that it plans to turn back the clock on expanded travel and trade between the U.S. and Cuba,” the group said.
“While challenges remain in terms of Cuba’s readiness for large volumes of American travelers, the past few years have seen a growth in business for U.S. travel agencies, tour operators, airlines, cruise lines, hotel and other travel companies. That progress is now at risk.”

Cuba Educational Travel, which organizes people-to-people exchanges and tours for U.S. citizens in Cuba, also released a statement criticizing the move.

“Additional prohibitions and oversight on travel will only confuse Americans and dissuade them from visiting Cuba, causing significant economic hardship to Cuban entrepreneurs and average Cuban families, as well as Americans working in the hospitality sector,” said Collin Laverty, president of Cuba Educational Travel. “The U.S government should trust its people and respect our constitutional right to travel freely. Americans are organically supporting the private sector and interacting with ordinary Cubans. Top-down orders to do so will not help to facilitate that process.”

The Relieved

An Airbnb spokesperson said in a statement that it appeared the homesharing platform would be able to continue operating.

“Airbnb has helped individual Cuban people earn extra income and we have seen how travel can break down barriers and promote understanding. Travel from the U.S. to Cuba is an important way to encourage people-to-people diplomacy,” the company said. “While we are reviewing what this policy could mean for this type of travel, we appreciate that the policy appears to allow us to continue to support Airbnb hosts in Cuba who have welcomed travelers from around the world. We look forward to reviewing the details of the policy and speaking with the administration and Congress about this issue in the weeks and months ahead.”

Cruise operators were among the most cheerful in the travel industry, all using the word “pleased” in statements. Norwegian Cruise Line Holdings added even stronger language:

“We were very concerned about any potential changes, given how popular Cuba itineraries have proven to be with our guests, and we view this as a win for the cruise industry, our valued guests and travel partners,” the company said. “Across our three brands, there are 70,000 guests booked to sail to Cuba who would have been very disappointed if they were unable to experience this spectacular destination.”

Norwegian, Carnival Corp., and Royal Caribbean Cruises, all stressed that they offer shore excursions that comply with regulations. What is still unclear is whether cruise lines will be able to continue to give cruise passengers the option to explore on their own while ships are in Cuba or if passengers will be forced to stay with an organized group.

Operators said they would review the additional regulations as they emerge.

Carnival Corp. chief communications officer Roger Frizzell said in an email that the company plans to move forward with scheduled cruises as well as its efforts to get approval for more ships to visit. He suggested the new measures might even provide a boost to the cruise option.

“We have always believed that cruising is the best way to experience Cuba, so this may ultimately highlight the advantages of traveling by cruise ship to Cuba to consumers,” Frizzell said.

Still Studying

Marriott International, the only American hotel company operating a property in Cuba, said in a statement that it was still analyzing the president’s directive.

“Its full effect on our current and planned operations in Cuba may depend on related forthcoming regulations,” the company said.

The hotel chain said it was still ready to build on the gains that had been made over the last couple of years. In March 2016, Starwood signed a management deal with a Cuban military-affiliated entity to operate three hotels in Cuba. The former Hotel Quinta Avenida is now a Four Points by Sheraton hotel. Marriott acquired Starwood in September 2016, and both companies had received U.S. treasury approval to do business in Cuba.

“We have invested significant resources establishing a presence in Cuba, and with one hotel open and another in the pipeline we have just begun our work creating opportunity and a more vibrant tourism sector on the island,” the statement said. “More importantly, as Cuba moves to reform its economy in the post-Castro era, American businesses should be present to lead by example. We will continue to urge the Trump administration and Congress to recognize and utilize travel as a strategic tool in efforts to improve relations with Cuba, allowing us to be part of a promising future, as opposed to reverting to the policies of the past.”

Airlines, too, said they were reviewing the administration’s new stance. While United was notably noncommittal about future plans, saying only that it was “currently reviewing these policy changes and will continue to follow this closely,” other carriers including JetBlue, American, Delta, and Southwest said they planned to keep flying to the island.

Delta Air Lines said the company would adhere to any changes in regulations regarding travel to Cuba and continue to provide daily non-stop service from New York-JFK, Atlanta and Miami to Havana within those parameters.

American too pledged to work with the administration to update any policies and procedures as needed.

“As a global airline, American is committed to continuing to operate service to Cuba,” the airline said. The statement warned that future changes in regulations could affect new plans for travelers: “We urge all customers who are planning travel to Cuba to closely monitor updates from the U.S. government.”

Online travel companies were reluctant to make any immediate statements on Wednesday before the policy changes.

A TripAdvisor spokesperson said it was too early to comment.

In October 2016, TripAdvisor was the first online travel company to get a a license from the U.S.Treasury Department’s Office of Foreign Assets Control to do business in Cuba. The license enables TripAdvisor to facilitate the booking of flights, hotels, vacation rentals/short-term rentals, and attractions in Cuba.

The user review side of TripAdvisor’s business already had a presence in Cuba.

Trumps Cuba policy changes came at an ironic time for Expedia Inc., which last month opened up its global points of sale, including Expedia.com, Hotels.com, Travelocity, Orbitz and CheapTickets, for the booking of hotels and home-sharing options in Cuba. Customers pay for their stays online at the time of booking.

An Expedia spokesperson didn’t have an immediate comment on Wednesday about the outlook for Cuba pending Trump’s announcement. Likewise the Priceline Group, which does business in Cuba, declined to comment.

Skift editors Andrew Sheivachman, Brian Sumers, and Dennis Schaal contributed to this report.

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Introducing Skift Best Keynote Speakers 2017

Skift Take: Great speakers can make or break an event. But what tips can meeting planners use to ensure they identify the best talent? And who are some of the top speakers generating buzz in the events world today? Skift Best Keynote Speakers 2017 is an attempt to answer these questions.

— Rafat Ali

Conferences, events and meetings are a multibillion-dollar industry in the United States. A recent calculation by Meeting Professionals International estimated the sector’s total value at close to $280 billion dollars. With so much money riding on the success of such events, and so much more competition for attendees, media attention, and sponsorship dollars, it’s essential for meeting planners to develop the most compelling programming possible. Increasingly that means picking the best possible event speakers.

Finding great speakers can help event organizers “check all the boxes” for a successful event, including boosting ticket sales, attracting interest from the media and generating social media mentions that boost attention to their conferences online. But even though meeting planners recognize the important role speakers play in the success of their events, picking the right people is getting more complicated. Genre-defying events like TED, SXSW, and C2 are upending long-held notions about the role speakers should play at events, creating a new expectation for interdisciplinary, idea-driven event content, and turning unknown individuals into celebrity performers overnight. Meanwhile, event tools like social media, and a new crop of younger attendees, are putting more pressure on event organizers to rethink the types of speakers they bring to their own conferences.

With all these questions in mind, Skift is today launching a new initiative called the Skift Best Keynote Speakers 2017. The list features an inter-disciplinary, cross-industry selection of some of the most interesting speakers picked from a shortlist of several thousand nominees who participated in one of several dozen of the world’s top events in 2016 and 2017. It also takes a closer look at the best practices used to identify and select great speakers, drawing upon interviews with some of the top event executives from organizations like SXSW, CES, and more.

Download Your Free Copy of Skift Best Keynote Speakers 2017

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CEO Interview: How Finnair Plans to Crack the Potentially Lucrative Chinese market


Finnair CEO Pekka Vauramo is betting his company’s future on Asia, especially the Chinese market. With a fleet of new Airbus A350s, it has the right plane for the routes. Finnair

Skift Take: Not every airline can be a global behemoth. Finnair mostly focuses on its niche — connecting Europe with Asia, including secondary Chinese cities.

— Brian Sumers

Editor’s Note: Following our previous CEO interview series in online travelhospitality, and destinations, as well as our CMO series across verticals, we’ve launched another series, this time focused on the CEOs of leading airlines outside of the United States.

Airlines_CEO_logo2To better understand the challenges facing airlines in an age of fluctuating oil prices, rapid growth, and changing passenger expectations, our Future of Passenger Experience series enables airline leaders to explain their best practices and insights. Read the rest of the series here.

This is the latest interview in the series.

While many of its European competitors, like Lufthansa Group, fly to most major global cities, Finnair tries to focus on what it does best — connecting Europe with Asia.

It’s a strategy that allows the airline to take advantage of the location of its Helsinki hub. For most of Europe, Finland is on the way to Asia, and Finnair, which flies the newest and most fuel-efficient widebody Airbus jet, the A350, has the right fleet for the routes.

But travelers in major European capitals generally can reach larger Asian cities, like Tokyo, Shanghai and Beijing, nonstop on their home-country carriers. So while Finnair flies to those larger markets, it also connects European cities with secondary cities in Asia, sometimes flying to airports with little, or no, European competition.

Finnair might not be the perfect airline for a Londoner headed to Tokyo, but it’s well-positioned to attract someone from London, Paris, Madrid or Brussels seeking fast, one-stop flights to Chongqing and X’ian in China, Krabi and Phuket in Thailand, and Ho Chi Minh City in Vietnam.

We met recently with Finnair CEO Pekka Vauramo in Cancun at the IATA Annual General Meeting, an annual conference for airline executives. We asked him about the airline’s Asia strategy, and whether it needs to tweak its onboard product to cater to Chinese travelers. We also asked about cabin interiors, including problems with the carrier’s new business class seats, manufactured by Zodiac.

Skift: You’ve had quality issues with A350 cabins and seats. Your interiors are manufactured by Zodiac, a company Cathay Pacific, United Airlines and American Airlines have also had problems with. What’s happening?

Vauramo: Yes, that is correct. The seat itself is not the issue, but what’s around the seat and all the panels relating to that module have been a big, big problem. The panels are not fitting. They have to be individually fitted in each place, and then of course if they are individually fitted in each place, there’s no spare parts available and things like that.

Skift: I know Cathay Pacific had a similar problem, but it said it was only on some planes. Is this on all nine of your A350s?

Vauramo:.Things are better with the latest deliveries. There are some things to re-work with them as well, but not to the same extent.

Skift: Is it frustrating?

Vauramo: Certainly, it’s frustrating when we buy a new aircraft that costs more than hundred million and the first thing we find out is that it’s not up to the standard. And they are things that are very visible to customers — they are the cabin interiors, they are the lavatories, and some of the kitchen, the galley issues.

We’re buying a new aircraft and the quality is not there.

Skift: Let’s talk about China, an important destination for Finnair. Why is it such a priority?

Vauramo: Look at our geographical position between Europe and China. We are on sort of great circle from there. The shortest route from most of Europe goes right above Helsinki. It’s a natural place to fly into, and then from there we have built our connectivity to Europe. [We fly to] 70 cities in Europe. We can collect people from 70 cities in Europe, fly them to Helsinki, and [take them] from there to about 18 destinations in Asia. And vice versa.

Skift: Many European and North American airlines don’t fly beyond Shanghai and Beijing because they say the secondary cities are not yet profitable. Is this a long-term play for Finnair? Perhaps you hope China will make money in the future?

Vauramo: It already has been a long term [strategy]. We started with Beijing direct flights from Helsinki in 1988. And then we’ve expanded. Shanghai, Hong Kong, Chongqing, Xi’an, Guangzhou. That’s the network we have there. It’s very much ongoing business, but of course the secondary cities like Xi’an and Chongqing, they are more long term. They are what Beijing used to be back in 1988 — in a development phase at this moment. But we see steady demand. The middle class is growing in those secondary cities rapidly as well, and they are the ones who really travel.

Skift: Is it tough to sell tickets in China?

Vauramo: It’s not easy. It’s different. The ones that travel far away for the first time, they prefer to go as a member of a group. Therefore, a tour operator is very important, and the agent is a very important point of contact. They book these groups together, and they book the seats. And then, this agent business, the tour operator business, is still — as far as airline is concerned — a fairly manual sort of business.

But more and more, people are traveling individually. When it comes to individuals that book directly, they use mobile devices to book their travel. They plan their travels and you need to be reachable through [the devices].

Skift: Do the Chinese want to go to the same European cities as everyone else? Do they come to Europe to visit London, Paris, Rome and Barcelona?

Vauramo: Yes, probably. They are of course the big cities. But things are changing. Right now, we’re seeing a lot of interest in Northern Europe — Finland specifically. First quarter this year, we saw 75 percent increase in Chinese passengers in Finland alone.

Skift: If you’re successful in the secondary Chinese markets, do you fear more airlines will follow you?

Vauramo: We will see the competition over time. We’re already seeing Chinese competition. We’ve started to see Chinese airlines flying from Xi’an to Paris.

Our opportunity is that [with connecting flights] … we don’t have to sell just one destination in Europe. We can sell multiple destinations. If you have a direct flight, you’re more or less selling that one destination.

Skift: Asian passengers can connect in Helsinki to reach 70 other cities. But you don’t have that same connectivity in China. You do not have a Chinese airline partner. And OneWorld, your alliance, does not have an airline in mainland China. Does this need to change?

Vauramo: Well, OneWorld has had a few attempts, but not succeeded. Currently, OneWorld companies have free hands in China to go into bilateral agreements [with Chinese airlines belonging to other alliances], but we don’t have anything to announce. But the President of China visited Finland on his way to meet President Trump, and he saw how many Chinese tourists are in Finland. And he’s very much encouraging it — encouraging the airlines to talk to each other and find partners. We’ve seen a lot of interest, but nothing to announce right now.

Skift: You recently started accepting Alipay on board. Are you selling more items?

Vauramo: We have such a big percentage of Chinese passengers on many of our China flights. And it’s something they are familiar with. They don’t have to play with the currencies. We have the wi-fi on board on all our wide-body aircraft so that’s what you need to use the Alipay. What we’ve seen is up to 200 percent sales increases on board.

Skift: This is for duty-free?

Vauramo: Yes. Duty-free, or things that they might buy and consume on board the plane. They are buying drinks [and food]. They are buying whatever we have, like cosmetics.

I think there’s a lot more potential to develop [the duty free] part of the business. With our Asian traffic in particular, they want to shop luxury goods.

Skift: On Asia flights, do you need special catering? Or are you merely a transportation provider, less worried about whether you have the right regional cuisine?

Vauramo: No, no. We have to impress the passenger. Not only that, we want to stay away from the transportation business. We need to adapt to, for example, Asian or Chinese taste. There are certain Japanese elements on our Japan flights, certain China elements on our China flights. We need to have the big rice bowl available. We need to have hot water available. Fairly simple things.

And then we can have the Finnish specialties as well. Nordic specialties. But certain basic things need to be what they are comfortable with.

Skift: For many Europe-Asia flights, you need permission from Russia to fly over Siberia. Other airlines have complained they have trouble securing rights. Are you pleased with the rights you have?

Vauramo: So far, yes. Of course, Russia keeps on saying that the air traffic control is not that well-developed over Siberia, so that’s why they restrict the airline flights over Siberia. But we are happy where we stand currently.

Skift: You’re expanding in the United States, with a new seasonal route to San Francisco. What opportunity do you see? Might you add more flights?

Vauramo: I’m sure there are more things out there, but of course we’ve increased recently quite a bit. We’ve added Chicago a few years back. We’ve added frequencies to Chicago. New York we’ve had for many, many years. We have Miami, and now San Francisco. For the time being, I think we will just digest these ones and try to make them year-round. That should be the next phase.

Skift: Last year, we interviewed International Airlines Group CEO Willie Walsh for this series. He said he believes there should be more airline consolidation in Europe. You’re a smaller independent airline. Do you agree?

Vauramo: Of course, things are moving that way. That is for sure. It’s clearly visible. We do have restrictions on our ownership by law — the government needs to hold more than 50 percent of shares and so as long as that is in place, there’s not much we can do. At the end of the day, it’s up to our owners, not us, to make decisions on who owns us. But a bigger home sometimes feels a bit safer than a small airline.

Skift: How does being government-owned affect the way you operate the airline?

Vauramo: Not much. We’ve had tough times in the past and the government is seen as a very stable owner in those circumstances. It has been a good owner. But of course, [we might have] some more flexibility without majority ownership.

Skift: Scandinavia is home to discount airline Norwegian Air. Has competing with Norwegian affected your business?

Vauramo: Not really because Norwegian is going to concentrate on the Atlantic and for us, only 10 percent of our capacity is on the North Atlantic. We are exposed, but it’s not a major exposure. We are 50 percent Asia, 40 percent Europe and 10 percent North Atlantic traffic. But we are of course following how they are doing.

Skift: Norwegian is expanding in Asia, and will start London-Singapore flights in September. Do you fear they will add more Asia flights?

Vauramo: I’m sure they will, over time, find themselves in the same places where we are. Of course, low-cost carriers, they require Open Skies. Otherwise they won’t be able to do that. Currently, we fly to the part [of Asia] where the skies are not open. You need the overflight rights, you need the rights to fly to China.

You can use Open Skies to fly to Singapore. And from Gatwick, you don’t have to go across the northern route to Singapore, so therefore [that’s why] they are possibly opening it.

Skift: Do you think flying low-cost carriers has changed what passengers expect? When travelers fly Finnair instead of Norwegian, they must be amazed at what they get for free.

Vauramo: Of course. The line between a low-cost and legacy carrier is somewhat fading. Some of the legacies can be fairly close, with the same service quantity. Many of the legacies have unbundled the product, especially the short-haul. I’m quite sure that we will see some legacies unbundling the long-haul product very soon as well. Whatever you [want] in addition to the seat, you’ll end up paying for.

Skift: What about product segmentation? On short-haul flights, most European airlines have two products — business class and economy class. In the United States., we often see four segments — first class, economy class with extra legroom, economy class, and Basic Economy. Do you see Europe following? Or is this a uniquely American phenomenon?

Vauramo: No, I think that’s the way it’s going. I do hear that there are even more segments that some people are considering. Of course, we are very close to the point when we will start seeing people having a really a low-cost configuration in the back-end of the aircraft. And then [there will be] something else in front of that. It’ll still be economy class, but not quite low cost.

Skift: You have a lot of leisure-oriented routes — you’ll even send an A350 to Puerto Vallarta in Mexico once a week next winter — and yet you have large business class cabins on long-haul planes. Why?

Vauramo:  We have almost 50 business class seats on a 300-seat aircraft. The business occupancy rates are pretty good.

We have a lot of tourists that we carry, not so much business people on many our routes. It looks like there’s a segment where the tourists want to be in business. There’s a trend where people are [taking] shorter holidays rather than one- or two-week holidays. They go for a few days. And if you fly 10 hours, in the economy or in business, it’s different how you arrive and how much you can get then out of your holiday.

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The Low-Cost, Long-Haul Carrier Revolution In 3 Charts

Gatwick airport

A Norwegian Dreamliner lands at London Gatwick. Low-cost carriers are gradually moving into the long-haul market. Gatwick airport

Skift Take: The low-cost, long-haul revolution is only just starting to take off. Will full-service carriers be able to adapt to this new reality or are we about to see a total realignment?

— Patrick Whyte

The liberalization of air travel has been one of the biggest successes of the European Union. The creation of one internal market created an environment where the likes of EasyJet and Ryanair could thrive.

In many markets the pair, along with other low cost carriers, have replaced the previously dominant legacy airlines, helping to drive down prices for consumers.

Airports Council International Europe highlight this change in its latest Airport Industry Connectivity Report.

In the last 10 years, direct air services within the EU have grown by 16 percent (see below). Low cost carriers have driven the growth though a 175 percent increase in direct routes, and this comes despite the retreat of full-service airlines, which actually saw their connectivity decrease by 8 percent.

Direct Connectivity 2017 vs 2007

Source: ACI Europe

At the moment almost all (98 percent) of this low cost carrier direct connectivity is consigned to intra-European flying but with the likes of Norwegian and IAG’s Level expanding their long-haul offering, this is likely to change.

A 146 percent increase (see below) in direct connectivity to external markets since 2007 underlines the growth potential. Of course, the base point for such a rise was incredibly low but it shows the trend. For the time being, this market is still dominated by the full-service carriers, which increased their share over the same period by 30.6 percent.


Source: ACI Europe

One consequence of the change in the low-cost carrier mindset has been the gradual move to larger markets and primary airports. The below chart shows how much they have improved their connectivity from Group I (more than 25 million passengers a year) airports.


Source: ACI Europe

Note:  Group I: Over 25 million passengers a year; Group II: 10 to 25 million passengers a year; Group III: 5 to 10 million passengers a year, and Group IV: 0 to 5 million passengers a year

With the low-cost model encroaching into long haul, full-service carriers will have to adapt — either by creating low-cost spin-offs or through the introduction of a new type of economy ticket. The latter, however, is fraught with difficulty as British Airways has seen.

Olivier Jankovec, director general of ACI Europe, said: “The low cost revolution is marching on – and nothing will stop it. Low cost carriers have moved into larger airports and hubs, and they are now making inroads into the long-haul market.

“Europe’s airports will see 87 long haul routes being operated by low cost carriers this summer, up from 14 just four years ago. The next step – which Ryanair has just started experimenting — is to offer feed to network carriers or even develop their own connecting product.”

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Malaysia Air Mulls New Aircraft Orders to Refresh a Tattered Brand

Charles Pertwee  / Bloomberg

A man is seen in silhouette as aircraft operated by Malaysian Airline System Bhd. stand on the tarmac at Kuala Lumpur International Airport in Sepang, Malaysia, on August 26, 2014. Malaysia Airlines is reviewing aircraft orders. Charles Pertwee / Bloomberg

Skift Take: Malaysia Airlines is mulling its options, including purchasing A330neos or Boeing 787 Dreamliners, or choosing to operate used aircraft, as the airline shows signs of recovering from its twin disasters of 2014.

— Dennis Schaal

Malaysia Airlines Bhd. has held discussions with Airbus SE about the purchase of A330neo wide-body jets but has so far been unable to agree a price for the planes.

The carrier is also seeking clarity regarding other aspects of the transaction, including delivery schedules, Chief Executive Officer Peter Bellew said in an interview Saturday. There’s no likelihood of an order being placed at this week’s Paris Air Show, and one could take until September at least, he said.

Malaysia Air said in March that it was looking at buying 25 to 30 A330neos or Boeing Co. 787s for delivery between 2019 and 2023, potentially worth more than $7 billion at list prices. Around 15 would replace older aircraft, with the rest for expansion.

“With fuel still relatively low and likely to stabilize at that level second-hand aircraft are also attractive, so the figures need to add up,” Bellew said in the interview. Though the A330neo is an attractive proposition, the 787 isn’t yet out of the running while pricing remains an issue, he added.

The A330neo, featuring upgraded engines from Rolls-Royce Holdings Plc, comes in two sizes advertised at $255 million and $291 million before discounts, while the 787 Dreamliner, a modern composite model, has three variants priced between $230 million and $313 million.

Talks are continuing regarding the lease of up to a dozen current-generation A330s, Bellew said, with half of the planes required in the first half of next year and the rest in 2019. They would mainly replace single-aisle Boeing 737s on medium-haul routes capable of supporting wide-bodies.

The Asian carrier has been in touch with more than a dozen leasing firms and other suppliers about the planes and should reach a decision soon, the CEO said. It’s unlikely that they’ll be sourced from Alitalia SpA, which seems likely to survive a bankruptcy filing amid interest from various parties, he said.

Malaysian is seeking more aircraft after paring its fleet and route network in response to a bookings slump that followed two fatal crashes in 2014.


©2017 Bloomberg L.P.

This article was written by Christopher Jasper from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Ryan Wolkov

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Funding for Carnival in Brazil Under Pressure Due to Economic Crisis

Leo Correa  / Associated Press

Samba school members wave a giant flag as they march toward the Sambadrome during a protest against mayor Marcelo Crivella in Rio de Janeiro, Brazil, June 17, 2017. The samba schools are protesting the decision by Crivella to cut carnival funding in half for the 2018 Carnival parade. Leo Correa / Associated Press

Skift Take: Tourism officials said Carnival in 2017 drew 1.1 million tourists and had an economic impact of $912 million. The quandary is whether Rio can afford to invest more funds into Carnival 2018 when the economic crisis is acute.

— Dennis Schaal

Singing popular songs, members of Rio de Janeiro’s samba schools protested Saturday against the mayor’s proposal to slash city funds for next year’s Carnival.

The demonstration that began outside the city hall came in response to Mayor Marcelo Crivella’s decision to cut by half the city’s contribution to the annual celebration.

Crivella plans to reduce the city hall’s support from $640,000 (2 million reals) to $320,000 (1 million reals) for each school, and says the difference will be spent on resources for children’s day care centers.

“We are under budgetary restrictions, which demands austerity and sacrifice from everyone,” Crivella told Globo TV earlier in the week. He added that “the beauty of the Carnival is in the samba dancing” rather than the expensive, multistory floats that samba schools build for their parade competition.

The Independent League of Samba Schools responded by saying that next year’s Carnival parades “would not be viable” under such cuts.

Dressed in the colors of their groups, about 200 people marched from city hall to the Avenida Marques de Sapucai, also known as the “Sambadrome,” where the schools hold their parades. Protesters sang along to the classics of Carnival, closing out their march with “Nao deixe o samba morrer” (“Don’t let samba die”).

Cid Carvalho, art director for the Beija-Flor school, said the dazzling spectacle of the schools’ parades will be hurt and he warned that the communities whose members participate in Carnival — often with costumes donated by the schools — will be the first to suffer from the cuts.

Held every year in the week preceding Ash Wednesday, Carnival is the biggest event in Rio. According to the city’s tourism agency, the 2017 Carnival attracted 1.1 million tourists and generated $912 million (3 billion reals) in revenues.

“If you had millions to invest, and got billions in return, why would you stop investing? Why risk those 3 billion?” Carvalho asked.

In office since January, Crivella is far less enthusiastic about the weeklong celebration than former mayors. A gospel singer and retired Pentecostal bishop, Crivella and his Universal Church of the Kingdom of God consider Carnival a “profane party.”

Despite his lack of sympathy for the event, Crivella won the support of samba schools in last year’s election with promises of increased public spending. He then skipped this year’s Carnival, passing on the traditional handing over of the city’s key to “Rei Momo,” the king of carnal delights.

Subsidies for Carnival had been already in trouble amid Brazil’s economic crisis. The city had doubled its contributions in 2016 after the samba schools lost support from the state oil company Petrobras and Rio de Janeiro state, and now Crivella is trying to roll back that measure.

“He wants to give his evangelic community a satisfaction, but he’s supposed to represent every citizen of Rio de Janeiro,” said protester Veronica Goncalves, a member of Mangueira school.

The city’s 13 main samba schools are expecting to schedule a meeting with the mayor next week.

Public opinion is sharply divided. This week, many people sounded off on the Facebook page of the samba schools guild. Most agreed with Crivella and said the samba schools be funded privately.

“We’re in a crisis! Only the samba schools have not woken up to our reality yet!” wrote one commenter.

This article was written by Liliana Michelena from The Associated Press and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Flyers Love-Hate Cheap Fares and 7 Other Aviation Trends This Week

United Airlines

United Airlines CFO Andrew Levy said as many as 40 percent of economy class customers are buying a new no-frills fare. Pictured here are economy seats on a United Express plane. United Airlines

Skift Take: This week we had airline loyalty on the brain. Most airlines are slashing loyalty perks except for the ultra-elite. Redeeming miles has never been so crazy and elusive.

— Sarah Enelow

Throughout the week we post dozens of original stories, connecting the dots across the travel industry, and every weekend we sum it all up. This weekend roundup examines aviation.

For all of our weekend roundups, go here.

>>KLM may not be a perfect airline, but it’s surprisingly spunky considering it’s owned by a giant French company that also controls Air France. The two airlines couldn’t be more different: CEO Interview: KLM CEO on Why His Airline Still Feeds Passengers for Free

>>Alaska’s Mileage Plan program continues to get stronger with a new series of incentives aimed at west coast Virgin America customers: Alaska Launches Promotions Just for Regional Loyalty Program Members

>>Are old-school U.S. airlines too focused on short-term profits and competing against low-cost carriers to deliver a quality product to their loyal passengers? Business of Loyalty: The Assault on Redemptions and Airline Loyalty

>>What would the Casper or Warby Parker of the aviation world look like? A Passenger Wish List When Designing an Airline From Scratch

>>Panama’s Copa Airlines is not well-known in most of North America, but it’s among the most profitable airlines in the Americas. Its secret? Like Southwest Airlines, it keeps its model simple: Interview: Copa Airlines CEO on Building the ‘Hub of the Americas’ in Panama

>>In today’s airline landscape, legacy carriers generally offer between 30 and 32 inches of seat pitch. Discount airlines give customers 28 or 29 inches. American Airlines had planned to shrink some seats to 29 inches, but customers complained. The plan is off. That’s good news: American Airlines Reverses Plan to Shrink Legroom on Some Planes

>>To the average flyer this makes little sense. Why would a Scandinavian airline build a new airline with the same name in Ireland? But many consumers expect to pay 30 or 35 Euros to fly from Copenhagen to London. If an airline is going to offer those prices, it needs to control costs: Why Scandinavia’s SAS Is Creating a New Airline With the Same Name in Ireland

>>What have we learned from this investor conference? Americans are cheap. Some travelers probably do win when buying these fares, but United says as many as 40 percent of customers are choosing them. Surely, some don’t know what they’re buying: United Says Customers May Dislike Basic Economy But They’re Buying It

Ryan Wolkov

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Paris Air Show Will Put Spotlight on Airbus Versus Boeing and Drones

Rick Bowmer  / Associated Press

In this Sept. 2, 2015, photo, a Lockheed Martin F-35 jet arrives at its new operational base at Hill Air Force Base, in northern Utah. The F-35 will do aerial displays at the Paris Air Show. Rick Bowmer / Associated Press

Skift Take: The annual Paris Air Show couldn’t come too soon as it gives the airline industry a chance to change the topic from high-profile customer service transgressions and IT failures to innovation from leading manufacturers and newbies.

— Dennis Schaal

While Airbus and Boeing will again hog the spotlight at the Paris Air Show with their battle for ever-larger slices of the lucrative pie in the sky, a lot of the really interesting stuff will be going on elsewhere at the upcoming biennial aviation and defense industry gathering.

Lockheed Martin’s F-35 jet will crane necks with high-speed aerial displays, drones will again be a hot topic and a would-be flying car will aim to show that it is closer to getting off the ground as a consumer ride. Defense contractors will be seeking customers for their latest high-tech weapons, including drones designed to act as wingmen to piloted aircraft in battle.

More peacefully, there’ll be the launch of a distress beacon with an integrated GPS transmitter to help locate planes that go down — an issue of vital importance after the failure to locate Malaysia Airlines Flight 370 that disappeared with 239 passengers and crew on March 8, 2014. And several companies are showcasing technologies to allow passengers to stay connected in the air.

With airlines suffering a string of public relations’ embarrassments recently — from the United Airlines’ passenger getting dragged off a flight to British Airways’ massive outage — the aerospace industry is eager to show off its goods.

Here, in greater detail, is a taste of what to watch for at the show, which runs from June 19-25:


The U.S. and European manufacturers invariably seek to out-do each other by announcing big deals at the show. The last event in 2015 brought orders for 421 planes worth $57 billion for Airbus and orders for 331 planes worth $50 billion for Boeing.

Airbus and Boeing orders have seen a downturn in recent years after a buying spree by Mideast and Asian carriers. This year, each company is expected to announce around 200 orders, though some may be airlines or leasing companies firming up earlier tentative orders.

Neither Boeing nor Airbus is unveiling a major new plane at the show. Likely to get attention are Boeing’s latest 787 model, the 787-10, and Airbus’ answer to it, the A350-1000, the latest version of the long-delayed Airbus wide-body. Boeing will also show its 737 Max 9 and Airbus will show the single-aisle A321, popular for its fuel efficiency.


Among the 130 aircraft on display, the star will likely be the cutting-edge F-35 stealth jet fighter, which costs about $100 million each.

Designed to creep up undetected on ground targets and for air-to-air combat, the jet will wow with daily flights — hoping to impress potential foreign customers for manufacturer Lockheed Martin.

Briefings, by the plane’s chief test pilot and others, on the jet’s aerial capabilities and the F-35 program could produce news about recent problems that grounded U.S. Air Force F-35s at a base in Arizona, after pilots reported symptoms of oxygen deprivation.

The U.S. Air Force will use the F-35 to replace the A-10 and F-16, and has already taken delivery of more than 100 of the planes.


Big, small, deadly or peaceful, drones of all shapes and sizes that do jobs once done by pilots — and jobs that pilots can’t — are expected to be a major source of interest and business at the show. There’ll also be discussion about how to ensure that civilian drones don’t unsafely clog the skies, by tripping over commercial flights and each other.

San Diego-based Kratos Defense and Security Solutions, Inc. says it will display its “fighter-like” Valkyrie and Mako drones, which it touts as being highly maneuverable, stealthy, able to fly at near supersonic speeds and “designed to function as wingmen to manned aircraft in contested airspace.”

There will also be drones for surveillance and intelligence-gathering.

Angela Charlton in Paris contributed to this report.

This article was written by John Leicester from The Associated Press and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Hotels Want Airbnb to Play Fair and 7 Other Hospitality Trends This Week


AccorHotels CEO Sebastien Bazin knows that Airbnb will continue to grow, and feels strongly there needs to be more transparency about the identity of hosts. He’s pictured above in a promotional video. AccorHotels

Throughout the week we post dozens of original stories, connecting the dots across the travel industry, and every weekend we sum it all up. This weekend roundup examines hospitality.

For all of our weekend roundups, go here.

>>The next generation of boutique hotels, according to Ian Schrager, is about adding technology and business smarts to the tried-and-true formula that he and other boutique pioneers perfected nearly 40 years ago: Interview: Ian Schrager on the Next Generation of Boutique Hotels

>>Hotel brands are developing more all-encompassing wellness retreats and partnering with trendy health brands in an attempt to deliver transformative travel experiences: Upscale Hotel Brands Are Forgoing FitTech to Focus on Holistic Wellness

>>A quick, no-nonsense guide to where to stay for business trips in one of the world’s most spectacular cities: Hong Kong: A Scenario-Based Guide to Hotels for Business Travel in Hong Kong

>>Most CEOs said the same thing they’ve said about Airbnb countless times before — ‘We need a level playing field’ — but there are signs that some are starting to take the $31 billion alternative accommodations provider a bit more seriously: Most Hotel CEOs Dismiss Airbnb’s Impact But Demand Level Playing Field

>>With these new features, it’s clear Airbnb wants to reduce discrimination on its platform, sign on more vacation rental managers, and generate more bookings. But is this enough to keep hosts happy? Airbnb Ramps Up Push to Get More Hosts to Choose Instant Booking

>>Hyatt, like every other hotel company out there, wants to get better rates from online travel agencies like Expedia. But does it have the scale (and the muscle) to do it? Hyatt Plays Hardball With Expedia Over Contract Negotiations

>>With online travel agencies offering their own loyalty programs consumers are faced with endless programs in the hotel space. Everyone is a loyalty program member everywhere, that’s loyalty in 2017: Consumers Are Facing a Glut of Loyalty Programs in Hospitality

>>If nothing else, Airbnb will be hoping the funding gets it some much-needed good public relations at a time when it is coming under increasing pressure in several key European cities: Airbnb Promises $5.6 Million For Community Tourism Projects in Europe

Ryan Wolkov

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